Govt to Provide Rs. 114 Billion Subsidy to Residential Consumers Under PM’s Relief Package

The federal government will give Rs. 114 billion subsidy to residential non-ToU (time of use) consumers having monthly consumption of up to 700 units excluding lifeline consumers under the relief package announced by Prime Minister Imran Khan. Sources said that the federal government will give Rs. 136 billion subsidy under the relief package of base rate reduction as well as capping fuel price adjustment at Rs. 3.0968 per unit for eligible consumers. The Finance Division will release the subsidy amount in four equal installments worth Rs. 34 billion every month from March to June. The financial implication of the electricity package would be Rs. 114 billion by reducing Rs. 5 per unit cut in tariff for residential and commercial consumers. Similarly, the fuel impact for both these categories would be Rs. 21.47 billion. The reduction of Rs. 5 per unit in tariff for residential and commercial consumers would entail Rs. 16.20 billion for distribution companies (DISCOs) in March 2022 and Rs. 2.91 billion for K-Electric while fuel impact for DISCOs is estimated at Rs. 10.22 billion and KE impact at Rs. 0.08 billion. DISCOs impact on account of tariff for the month of April is projected at Rs. 21.75 billion and K electric Rs. 3.74 billion while fuel impact was estimated at Rs. 6.27 billion for DISCOs. Meanwhile, Rs. 5 per unit tariff reduction impact for the month of May 2022 for DISCOs has been projected at Rs. 28.51 billion and KE at Rs. 4.42 billion whereas the fuel impact of DISCOs has been estimated at Rs. 1.05 billion and KE at Rs. 0.67 billion. While for the month of June 2022, the impact of DISCOs on account of tariff cut is projected at Rs. 32.49 billion and KE at Rs. 4.55 billion. The gap for fuel cost adjustment (FCA) subsidy for DISCOs is Rs. 2.86/kWh for March 2022, Rs. 190/kWh for April, Rs. 0.26/kWh for May and Rs. 0.55 for June 2022 while the subsidy gap of K-Electric is Rs. 0.21 for March 2022 and Rs. 1.15 for May 2022.